Why doesn't anyone blame Ronald Reagan?

[techs]

Up til Reagan became President the Republican party had as its central policy that deficits were bad. Even Republican Presidents who had to contend with a war, like Nixon in Viet Nam, were always about cutting the deficit.
Then along came Reagan who exploded the deficit. Bush Sr. was the last Republican who actually tried to keep the deficit down, but he seems an aberration.
So, if the Republican policy of huge deficits started with Reagan, and every Republican President and candidate since Reagan claims to believe in Reagans economics, why does't Reagan get any of the blame for the Republican shift to huge deficits?

 

[IronWing]

He does.

 

[Kadarin]

I get the impression that true conservatives in the Republican party are starting to realize this. We'll see if this amounts to anything over the next few years.

 

[hellod9]

Because Reagan was "popular" when he was in office?

 

[DaveSimmons]

He also gets a free pass for drug and arms dealing, aiding terrorists and death squads (Iran-Contra).

 

[XZeroII]

So let me get this straight...

Bush is on his way out and your best buddy is moving in so now you have to start in on Regan? Are you so filled with hate that you have to start up with Regan now?

 

[SirStev0]

I am hoping now that the Bush years are coming to an end maybe people will stop this farce that Reagan was a good let alone great president ...

 

[Infohawk]

It's true that many independents and conservatives think Reagan made no mistakes. I think most liberals / Democrats think Reagan was pretty awful.

Reagan's spending exemplifies conservative hypocrisy. They like spending as long as it's on things they like, like the military.

 

[Moonbeam]

About the only thing associated historically with Republicans, and undeservedly so, of any worth, is fiscal responsibility. The Democrats, if they have any brains, will peal such conservatives away.

 

[Atomic Playboy]

People do blame Ronald Reagan. Where have you been?

 

[sonambulo]

People do blame him. As time passes his popularity is going to wane.

 

[seemingly random]

It'll be great to see the reagan highways and reagan airports renamed to obama highways and obama airports in 9 years.

 

[jackace]

Here is a very good article by Nouriel Roubini on Reaganomics.

http://pages.stern.nyu.edu/~nroubini/SUPPLY.HTM

The reason why supply side effects do not work is very simple: the estimated responses of labor supply and savings to tax rate cuts are too small to generate the extra revenues that would maintain a tax rate cut revenue neutral.

Consider the evidence on each of these two effects.

1. The labor supply effect:

1.1. The maximum income tax bracket was reduced from 91% to 70% during the Kennedy presidency in the 1960s and then down to 50% by Reagan in 1981.3. However, the labor force grew at an average rate of 1.6% over the 1982-89 period, about the same as during the previous four years. So the first Reagan tax cuts of 1981 had no effect on labor supply.

1.2. The maximum tax bracket was reduced from 50% to 28% in 1986 but again this tax cut had no positive effect on labor supply. A study by Randall Mariger, an economist at the Federal Reserve Board, found that tax rates cuts increased the labor supply by less the 1% between 1985 and 1986.

1.3. The 1993 Clinton increase in the top marginal tax bracket to 39.6% had no effect on the labor supply of the rich, (see the discussion above).

2. The Effect on Savings:

2.1. The evidence is that the response of savings to the after-tax real return to savings is quite small. In the 1973-1980, private saving averaged 7.8 percent of GDP, and dropped to 6.9% in 1986 and 4.8% in 1989. In other words, the saving rate was significantly lower after the 1981 and1986 tax cuts than before it.

2.2. Computer simulations suggests that, even in the case of an extreme policy change, the elimination of all income taxes to be replaced by a tax on consumption only, private savings would increase only by 20%. In other terms, since private savings are about 5% of GDP, in the best scenario they would become 6% of GDP.

2.3 About 80% of savings are already sheltered from current taxation in pension plans that are tax-deferred. So, any policy change that increase the return to taxation would have minimal effects on savings.

So, in conclusion the verdict from history and empirical evidence is quite clear. Supply side economics is "voodoo economics". Reductions in tax rates (starting from initial moderate tax rate levels) do not siginificantly increase labor supply and savings, do not increase economic growth, do not raise total tax revenue and do not reduce budget deficits. Their likely effect on the level and growth rate on output is close to zero while they lead to significantly larger budget deficits.

 

[OCGuy]

I blame Calvin Coolidge

 

[counterstrikedude]

i blame god!

i blame atheism!

i blame science!

it's all the same argument.

stop blaming and focus on now.

i blame jimmy carter for forcing banks to give easy credit, which i suspect could have been a leading cause in our current economic downfall.

but alas, the blame game doesnt solve anything. as soon as we get over this "obama is going to change the playing field" the better off we'll be. i can wait 4 years.

 

[mshan]

According to the PBS American Experience series:

- Ronald Reagan never submitted a balanced budget.
- Ronald Reagan owes his positive legacy to George H. W. Bush, who cleaned up his mess by fashioning a pragmatic bi-partisan deal to cut spending and raise taxes, and in doing so, was responsible for 60% of the budget surplus that Clinton got the credit for.
- also seemed to suggest that Alzheimer's had already gripped Reagan in those last couple of years of his presidency, but the skillful handlers of his early years weren't there to cover up for him

Obama is going to have to clean up after W*, and the question is, can he turn the economy around quickly enough to get reelected in 4 years?



* Before the stock market meltdown, savvy commentary I read said that either Obama or Mclame would have to cut spending and raise taxes to restore fiscal health to the country. Given the mess we are in, it sounds like permanent fixes are going to have to give way to short term patches (massive fiscal stimulus in the form of job creating public works) to prevent a what was "only" a nasty recession (1929 or so) from becoming a tragic Great Depression (1932 revisited)...

 

[Lemon law]

It really depends on how honest the Repubs will be with themselves, Reagan was a disaster, GWB who aped his policies is a hated disaster.

Even though Reagan was an idiot, the American people wanted to like him, too many in the GOP wanted to like GWB also, but that Shark was jumped even as he was reelected in 2004. Kerry, as the devil we did not know could not beat the devil we did know. And now GWB could not run for dogcatcher unopposed.

 

[BoomerD]

Techs...I've blamed Ronnie Rayguns almost every day for the last 20 years...and accused him for the previous 8. IMO, he's the ONLY President who MAY have been as bad as Bush...of if not as bad...nearly so.

 

[RocksteadyDotNet]

Starve the beast = Epic Fail

 

[marincounty]

I do blame him for a lot. He's also dead. Get over it.

 

[Dman877]

But... but Reagan won the Cold War!!

 

[JS80]

Originally posted by: jackace
Here is a very good article by Nouriel Roubini on Reaganomics.

http://pages.stern.nyu.edu/~nroubini/SUPPLY.HTM

The reason why supply side effects do not work is very simple: the estimated responses of labor supply and savings to tax rate cuts are too small to generate the extra revenues that would maintain a tax rate cut revenue neutral.

Consider the evidence on each of these two effects.

1. The labor supply effect:

1.1. The maximum income tax bracket was reduced from 91% to 70% during the Kennedy presidency in the 1960s and then down to 50% by Reagan in 1981.3. However, the labor force grew at an average rate of 1.6% over the 1982-89 period, about the same as during the previous four years. So the first Reagan tax cuts of 1981 had no effect on labor supply.

1.2. The maximum tax bracket was reduced from 50% to 28% in 1986 but again this tax cut had no positive effect on labor supply. A study by Randall Mariger, an economist at the Federal Reserve Board, found that tax rates cuts increased the labor supply by less the 1% between 1985 and 1986.

1.3. The 1993 Clinton increase in the top marginal tax bracket to 39.6% had no effect on the labor supply of the rich, (see the discussion above).

2. The Effect on Savings:

2.1. The evidence is that the response of savings to the after-tax real return to savings is quite small. In the 1973-1980, private saving averaged 7.8 percent of GDP, and dropped to 6.9% in 1986 and 4.8% in 1989. In other words, the saving rate was significantly lower after the 1981 and1986 tax cuts than before it.

2.2. Computer simulations suggests that, even in the case of an extreme policy change, the elimination of all income taxes to be replaced by a tax on consumption only, private savings would increase only by 20%. In other terms, since private savings are about 5% of GDP, in the best scenario they would become 6% of GDP.

2.3 About 80% of savings are already sheltered from current taxation in pension plans that are tax-deferred. So, any policy change that increase the return to taxation would have minimal effects on savings.

So, in conclusion the verdict from history and empirical evidence is quite clear. Supply side economics is "voodoo economics". Reductions in tax rates (starting from initial moderate tax rate levels) do not siginificantly increase labor supply and savings, do not increase economic growth, do not raise total tax revenue and do not reduce budget deficits. Their likely effect on the level and growth rate on output is close to zero while they lead to significantly larger budget deficits.

Great, change all tax rates to 70% because it won't decrease labor supply and won't harm the economy!

 

[Fox5]

Originally posted by: Infohawk
It's true that many independents and conservatives think Reagan made no mistakes. I think most liberals / Democrats think Reagan was pretty awful.

Reagan's spending exemplifies conservative hypocrisy. They like spending as long as it's on things they like, like the military.

I don't think most Democrats think enough about the economy (on a critical level) to care about Reagan.

Democrats are the party of civil values.
Republicans are the part of finances.

That said, Reagan and Bush Jr were horrible Presidents. Eisenhower, Bush Sr, and Nixon seemed pretty good. Personally, I think Kennedy seemed like a pretty bad President, and Clinton pretty good.

Oh, and if there's anything civilization-style games have taught me:
A protracted war is the perfect way to devastate your economy
Even small increases in taxes can avoid otherwise having to sell off half your empire
And if all else fails, stop upgrading infrastructure until you have dealt with the money losing parts of your empire (say, the south and midwest) and brought them on par with the rest. Or wait until a massive technological breakthrough occurs that saves your civilization from ruin.

 

[bozack]

Why blame the guy? he was popular when in office, and remains so with many...

He liked spending big on the military and space exploration, two things that take a big big hit with a democratic administration (least that is what the Govt employees told me when I worked at NASA)...

Then again us conservatives love to blame Clinton for most everything...

It is all about perspective, and from mine Regan was a decent president, much better than Carter (Captain inflation...though I don't really care as this was before my time) and certainly Clinton, but like Carter, Regan was president when I was too young to vote so why bother complaining about it.

 

[JS80]

Originally posted by: Fox5

Originally posted by: Infohawk
It's true that many independents and conservatives think Reagan made no mistakes. I think most liberals / Democrats think Reagan was pretty awful.

Reagan's spending exemplifies conservative hypocrisy. They like spending as long as it's on things they like, like the military.

I don't think most Democrats think enough about the economy (on a critical level) to care about Reagan.

Democrats are the party of civil values.
Republicans are the part of finances.

That said, Reagan and Bush Jr were horrible Presidents. Eisenhower, Bush Sr, and Nixon seemed pretty good. Personally, I think Kennedy seemed like a pretty bad President, and Clinton pretty good.

Oh, and if there's anything civilization-style games have taught me:
A protracted war is the perfect way to devastate your economy
Even small increases in taxes can avoid otherwise having to sell off half your empire
And if all else fails, stop upgrading infrastructure until you have dealt with the money losing parts of your empire (say, the south and midwest) and brought them on par with the rest. Or wait until a massive technological breakthrough occurs that saves your civilization from ruin.

Are you running in 2012?